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Why Rivian Stock Fell After Hours Despite Beating Earnings Estimates

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Rivian beat analysts’ second-quarter EPS and revenue estimates. Despite this, the stock fell slightly in post-market trading, as investors are not happy about the heavy losses the company expects in the future.

Electric vehicle maker Rivian (RIVN) reported its Q2-2022 results after market close today. Its revenue and earnings per share (EPS) figures beat expectations. However, the stock fell about 2% in post-market trading. This may be because RIVN expects a wider net loss, going forward. 

Rivian’s Q2 revenue came in at $364 million, beating analysts’ estimates of $337.5 million, as it delivered 4,467 vehicles. Last year, the company had no revenue. Meanwhile, adjusted earnings per share were -$1.62 compared to estimates of -$1.63.

Rivian lost roughly $1.7 billion in the quarter, but the losses won’t stop there. The company now expects to lose $5.45 billion for the full year compared to its previous estimate of a $4.75 billion loss. The higher expected losses can be partly attributed to common issues, such as inflation and supply-chain issues.

Nonetheless, RIVN has $15.5 billion in cash reserves, which it believes will be enough to support its growth until 2025. While Rivian is focused on increasing its production, it cut its 2022 capital expenditures guidance from $2.6 billion to $2 billion.

Meanwhile, preorders for its vehicles stood at 98,000 compared to “over 90,000” as of Q1, and the number of preorders accelerated quarter-over-quarter.

Is Rivian Stock Expected to Rise?

Turning to Wall Street, Rivian has a Moderate Buy consensus rating based on nine Buys, five Holds, and one Sell assigned in the past three months. The average RIVN stock price target of $49.33 implies 26.65% upside potential. Price targets range from a low of $24 to a high of $108. The stock currently trades near $38.

TipRanks’ Top Retail Investors are Bullish on COIN Stock

TipRanks currently tracks 553,246 investor portfolios that use the Smart Portfolio tool. The top investors, which amount to 110,649 portfolios, appear highly bullish on RIVN stock. In the past 30 days, the number of top-performing TipRanks portfolios holding RIVN stock increased by 7.5%.

In the past seven days, this number increased by 1.1%. This leads to very positive investor sentiment, above the sector average, as shown in the image below:

Conclusion: Rivian’s Earnings Beat Wasn’t Enough to Boost Shares

While Rivian is finally making a respectable amount of revenue, its losses are piling up and are expected to continue for a while. Still, the company beat expectations, which partially offset the higher net losses that it is forecasting for the rest of the year. Regardless, investors expected better, causing the stock to fall ~2% after the report.

On a positive note, both analysts and top retail investors on TipRanks are bullish on RIVN stock. It also has plenty of cash to sustain its cash burn for about three years or so. After a 78% drop from its highs, Rivian stock may be worth considering for those that are bullish on the electric vehicle industry.

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